SOMFY_ANNUAL_FINANCIAL_REPORT_2017

07 CONSOLIDATED FINANCIAL STATEMENTS

TAX PROOF NOTE 11.1

€ thousands

31/12/17

31/12/16

Profit before tax from continuing operations

162,328

175,268

Share of expenses on dividends

1,600

1,591

Reclassification of CVAE to Income tax Reclassification of CICE to Employee expenses Reclassification of CIR to Other operating income

–3,589 –2,657 –5,717

–3,273 –2,041 –5,501 –1,086 –10,310 –27,118 137,840 34.43%

Other

5,146

Permanent differences

–5,217

Net profit taxed at reduced rate Net profit taxable at standard rate

–31,707 125,403 34.43%

Tax rate in France

Tax charge recalculated at the French standard rate

43,176

47,458

Tax at reduced rate

4,915

4,203

Difference in standard rate in foreign countries

–21,605

–24,282

Tax losses for the year, unrecognised in previous periods, deficits used

1,363

779

Effect of the rate difference

–20,242 –6,216 –18,538

–23,503

Tax credits

–5,421

Other taxes and miscellaneous

8,549

Group tax

3,095 1.91%

31,286 17.85%

Effective rate

The results taxed at a reduced rate involve royalties, which were taxed at 15.5% (unchanged from 2016). The main countries that contributed to the difference in the tax rate were Tunisia (€14.7 million), Germany (€0.8 million), other European countries (€5.2 million) and Middle Eastern countries (€1.3 million). Tax credits were primarily affected by the SOPEM tax credit (Poland): €5.9 million in 2017 compared with €5.0 million in 2016. Other taxes and miscellaneous items included, in particular, the French Corporate Value-Added Contribution (CVAE), which amounted to €3.6 million in 2017 and €3.3 million in 2016. In 2017, this item also included the tax rebates mentioned in the Highlights (€22.3 million), and a new exceptional contribution of 1% in Tunisia (€0.5 million). Other taxes and miscellaneous items in 2016 also included the 3% contribution on dividends, which amounted to €1.2 million, and the impact of an exceptional contribution of 7.5% in Tunisia (€3.8 million). In France, the Draft 2018 Finance Act, in keeping with the 2017 Finance Act, will change the terms for the gradual decrease in the normal corporate income tax rate (33.1/3%), which will be spread over a period of five years as from 2018, and lead to a 25% tax rate in 2022. The deferred tax calculation has been adjusted accordingly and generated a gain of €1.1 million over the financial year. The effective tax rate, restated for tax claims, the change in the deferred tax rate in France, and an additional tax credit in Poland, amounted to 17.91% at 31 December 2017. assets and liabilities Current tax

Retained losses capitalised or used

Deferred tax relating to tax losses was not capitalised where it was deemed unlikely that future taxable profits will be sufficient to absorb unused previous tax losses. The total amount of these losses was €65.3 million at the end of 2017, based on the standard tax rate, compared with €60.2 million at the end of 2016. No significant deferred tax assets were recognised in 2017 in relation to tax losses arising during the financial year or in previous years.

DEFERRED TAX RECOGNISED IN ITEMS OF OTHER NOTE 11.2 COMPREHENSIVE INCOME

€ thousands

31/12/17 31/12/16

Deferred tax assets Actuarial gains and losses – on pensions Foreign currency hedges – Raw material hedges – Deferred tax liabilities Financial assets available – for sale Foreign currency hedges – Raw material hedges –

2,041

5,462

– –

130

–

–

–

166

– –

31

The change in tax liabilities and receivables was due to the effect of tax instalments.

NET DEFERRED TAX

1,844

5,592

108

SOMFY – ANNUAL FINANCIAL REPORT 2017